Privatization of everything we know and need, for the enrichment of elite private equity investors, is not commonly understood. Many understand that consolidation and deregulation have allowed large corporations to control media and information, but few comprehend how the ultra wealthy have destroyed accountability, transparency and the public interest in broadcasting, radio, digital and print news production and distribution.

In The Rise of Private Equity Media Ownership in the United States: A Public Interest Perspective, Matthew Crain investigates private equity takeovers (1999-2009) in the media sector, and explains how private equity firms function in the financial landscape. Focusing on profit maximization strategies and debt burdens imposed on acquired companies, Crain observes that private equity firms and consortiums pose a challenge to effective media regulation, that is distinct from the corporate media ownership model.

Corporate media rarely discussed the American aristocracy and how their agenda affects society. Consumers blame banks, but they have no idea how financial institutions are used by private equity traders to constantly replenish aristocratic wealth at our expense. They have little awareness of where that wealth came from, and almost never discuss the continuity of aristocratic theft from the public treasury over the last two centuries. Crain’s analysis can thus be considered a primer on the impact of reckless private equity investing, using inherited wealth and investment banks to cannibalize the economy.

Able to evade or avoid regulation associated with publicly traded stocks, private equity firms and consortiums — using holding companies and investment banks — have conducted immense leveraged buyouts that literally ruin companies. Through debt burdens, asset liquidation and wholesale employee termination, the private equity firms enable cash extraction that has imperiled mainstream media, leaving a hollowed out shell, where replacement of journalism by public relations is commonplace.

As Cain notes, democracy requires public spheres, of which the media system is a core institutional component. Private equity takeovers in the media sector — especially broadcasting, cinema, cable, telecommunications, digital and print publishing — imposes qualitative changes to media firms by these high-stakes investment groups that, “raises issues of adherence to standards of journalistic ethics and values.” Once the cash has been extracted, the social value of media firms as democratic institutions is structurally undermined.

As Crain observes, “Fewer reporters and editors make it easier for public relations firms to place unaltered messages into the news.” “Moreover,” says Crain, “growing pressure to turn a profit on journalistic production contributes to ongoing problems of commercialization of news, especially regarding the blurring distinction between editorial and advertising content.”

“Private equity firms,” remarks Cain, “are fundamentally non-transparent in their basic structure…Whereas publicly traded companies are legally obligated to periodically file extensive financial information with the Securities and Exchange Commission (SEC), including detailed accounts of all holdings and subsidiaries, private firms are not subject to such financial disclosures.” This, says Crain, is “antithetical to the public interest obligations of the media sector.”